Rent relief on its way to Silicon Valley — eventually and for select few

San Jose and Santa Clara County are preparing to decide how to spend more than $117 million in federal rent subsidies.

That’s probably not enough to cover everything tenants owe their landlords since the beginning of the pandemic. And it hasn’t been decided exactly who will be allowed to collect their fair share of the $2.6 billion California got from the latest round of federal COVID-19 relief — or how many hoops they’ll have to jump through to get it.

Nearly 1 in 5 tenants statewide were behind on rent at the end of last year, according to a recent analysis by the Bay Area Equity Atlas and the Housing Now! California coalition. That includes more than 37,000 households in Santa Clara County that owed an average of $4,651 for a combined total of $173.5 million.

“We need additional federal funding,” said Michelle McGurk, assistant to the city manager. “What we have is not going to be enough.”

For those who need to pay their debts, the financial assistance can’t come soon enough. But getting the funds into the hands of families who need it will be complicated, especially because the money from the U.S. Treasury Department will make its way to landlords and tenants only after passing through state, county and city governments.

Here in Silicon Valley, those funds will likely also be filtered through established South Bay charities, including Sacred Heart Community Service, Destination: Home and Catholic Charities of Santa Clara County.

Divvying up rent relief

Of the $2.6 billion in federal rent relief, California cities and counties with more than 200,000 people got $1.1 billion.

San Jose received a direct payment from the Treasury of more than $30 million at the end of January. Similarly, Santa Clara County got $26.9 million from the federal government for tenants outside the city who haven’t been able to pay rent during the pandemic.

The state retained the lion’s share — $1.5 billion.

From that pot of money, Sacramento lawmakers allocated an additional $60 million to be split between tenants and landlords in San Jose and the rest of Santa Clara County. And it only gets more convoluted because the state will distribute those funds — but the city and the county are free to establish their own programs for getting it into the hands of tenants and landlords who need it, or they may choose to allow the state to direct some or all of that money.

The City Council will discuss how to distribute the funds at its meeting Tuesday. Staff is recommending the council take a hybrid approach to make sure San Jose is protecting tenants who are most likely to lose their housing without assistance. There are approximately 66,000 households in San Jose who earn less than 30% of the Area Median Income and many of those have fallen desperately behind on their rent during the pandemic.

“We think there are going to be a lot of families behind on rent that are going to be left out if we follow the state’s model,” McGurk told San José Spotlight.

If the city chooses to go its own way, the council will also have to decide how to distribute the funds to prioritize its most vulnerable residents. But city officials say it is likely San Jose will use lessons learned from last year’s rent relief program.

“The quickest way to get funds to residents will be to build on existing programs and partnerships,” said Carolina Camarena, director of communications for the city manager’s office. “The Santa Clara County Homelessness Prevention System, under the leadership of Destination: Home and Sacred Heart Community Service, pivoted quickly to provide $31 million in rental relief and direct financial assistance to 14,000 households in 2020.”

The bill passed by the Legislature in January gives priority to landlords of low-income tenants — those who make less than 80% of the Area Median Income — and allows the landlords to recoup 80% of rent owed from April 2020 until March 2021 — if the property owner agrees to forgive the remainder.

The state rent relief package also makes provisions for tenants whose landlords refuse that deal, making it possible for them to continue to avoid eviction through June 31 with subsidies to help them pay the 25% of monthly rent the law requires.

Tenant advocates say they are worried the various programs administered by different governments and charities will be daunting for families who are already in dire straits.

“It could be a rocky transition,” said Tina Rosales, a policy advocate at the Western Center on Law & Poverty, a statewide legal aid group. “It is going to require a massive education program to make sure that tenants who are eligible for rent relief are getting it.”

Contact Adam F. Hutton at [email protected] or follow @adamfhutton on Twitter.